Deception in Networks: A Laboratory Study

Rong Rong () and Daniel Houser
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Rong Rong: Department of Economics, Weber State University

No 1046, Working Papers from George Mason University, Interdisciplinary Center for Economic Science

Abstract: Communication between departments within a firm may include deception. Theory suggests that telling lies in these environments may be strategically optimal if there exists a small difference in monetary incentives (Crawford and Sobel, 1982; Galeotti et al, 2012). We design a laboratory experiment to investigate whether agents with different monetary incentives in a network environment behave according to theoretical predictions. We found that players’ choices are consistent with the theory. That is, most communication within an incentive group is truthful and deception often occurs between subjects from different groups. These results have important implications for intra-organizational conflict management, demonstrating that in order to minimize deceptive communication between departments the firm may need to reduce incentive differences between these groups. Length: 19

Keywords: social networks; deception; strategic information transmission; experiments (search for similar items in EconPapers)
JEL-codes: C92 D02 D85 (search for similar items in EconPapers)
Date: 2014-04
New Economics Papers: this item is included in nep-cbe, nep-cdm, nep-cta, nep-exp, nep-gth, nep-hrm, nep-net and nep-soc
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Journal Article: Deception in Networks: A Laboratory Study (2016)
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